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BEIJING, Dec 17 (Reuters) - China’s banking and insurance regulator said on Thursday it has approved the opening of China Galaxy Asset Management Co., Ltd, the fifth asset management company in the country that will mainly deal with bad loans and toxic assets nationwide.
Chinese banks are braced for rising bad debt in the coming months as policies designed to give borrowers breathing space on loans during the coronavirus crisis expire.
The newly set-up company is 65% held by China Galaxy Financial Holdings, and 13.3% by Central Huijin Investment Co, an investment arm of China’s sovereign fund China Investment Corp, the China Banking and Insurance Regulatory Commission said in a statement on its website.
China Galaxy Asset Management is authorised to buy and invest in non-performing assets of financial institutions, as well as to carry out bankruptcy restructuring and management, the regulator said.
It will be located in Beijing and have registered capital of 10 billion yuan ($1.53 billion), the statement showed.
The country’s other four specialist bad loan banks are China Cinda Asset Management, China Huarong Asset Management , China Great Wall Asset Management and China Orient Asset Management. ($1 = 6.5336 Chinese yuan renminbi) (Reporting by Cheng Leng and Ryan Woo; additional writing by Tom Daly; Editing by Alison Williams, Kirsten Donovan)